Draft Instructions for Licensing Insurance Intermediaries, Regulating Their Activities and Responsibilities

Instructions for Licensing Insurance Intermediary and Regulating Their Activities and Responsibilities

2024 (No. ) Instructions
Instructions for Licensing Insurance Intermediary, Regulating Their Activities and Responsibilities Issued by the Board of Directors of the Central Bank Pursuant to the provisions of Paragraph (a) of Article (82) and Paragraph (b) of Article (109) of the Insurance Activities Regulation Law No. (12) of 2021

Contents
Page Subject
Article (1): Legal Basis ................................................................................................................... 3
Article (2): Definitions ..................................................................................................................... 3
Article (3): Practice of Insurance Intermediary Activities ............................................................... 4
Article (4): General Conditions for Licensing Insurance Intermediary ........................................... 5
Article (5): General Conditions for Manager of Insurance Affairs and Person in Charge of Brokerage Activities and Employees ........................................................ 7
Article (6): Conditions for Approval of Manager of Insurance Affairs ............................................ 8
Article (7): Conditions for Approval of Person in Charge of Brokerage Activities ....................... 10
Article (8): Application for Insurance Intermediary License .......................................................... 13
Article (9): Procedures for Insurance Intermediary License .......................................................... 14
Article (10): Changes to Data and Information ............................................................................. 16
Article (11): Periodic Data .............................................................................................................. 16
Article (12): License Renewal ........................................................................................................ 17
Article (13): Adding Branches to Insurance Intermediary License ................................................. 17
Article (14): Requirements for Opening Branches ......................................................................... 18
Article (15): Obligations of Insurance Intermediary ..................................................................... 19
Article (16): Rules of Professional Practice and Ethics ................................................................. 23
Article (17): Obligations of Insurance Company ........................................................................... 26
Article (18): Insurance Intermediary Register ............................................................................... 27
Article (19): Suspension of License .............................................................................................. 28
Article (20): Inspection of Insurance Intermediary ....................................................................... 29
Article (21): Administrative Penalties and Corrective Procedures ................................................. 29
Article (22): General Provisions .................................................................................................... 32
Article (23): Harmonization of Situations ..................................................................................... 33
Article (24): Repeal ....................................................................................................................... 35

2024 (No. ) Instructions
Article (1)
Legal Basis
These Instructions are called "Instructions for Licensing Insurance Intermediary, Regulating Their Activities and Supervision of 2024" and are issued pursuant to the provisions of Paragraph (a) of Article (82) and Paragraph (b) of Article (109) of the Insurance Activities Regulation Law No. (12) of 2021. They are considered effective from the date of 2024/ / .

Article (2)
Definitions
The following words and expressions wherever they appear in these Instructions shall have the meanings assigned to them, unless the context indicates otherwise:

• The Law: The Insurance Activities Regulation Law No. (12) of 2021.
• Manager of Insurance Affairs: The natural person approved by the Central Bank and responsible for the brokerage activities in insurance at the Insurance Intermediary.
• Person in Charge of Brokerage Activities: The natural person approved by the Central Bank to practice brokerage activities in insurance at the Insurance Intermediary.
• Employee: The natural person employed by the Insurance Intermediary to perform brokerage activities in insurance.
• Client: The person for whose benefit the Broker practices brokerage activities in accordance with the provisions of these Instructions and the issued decisions.
• Specified Insurance Contracts and Coverages: Insurance contracts approved by the Central Bank as specified benefits and coverages included in the issued decision regarding the portfolios.

Article (3)
Practice of Insurance Intermediary Activities a. The license for Insurance Intermediary shall be granted within the branches of one type of insurance. b. The license for Insurance Intermediary may be granted to practice brokerage activities in insurance in one of the two types of insurance, provided that the license is not granted to practice life insurance and general insurance activities simultaneously, or to practice brokerage activities in both types of insurance simultaneously by the Person in Charge of Brokerage Activities or the Manager of Insurance Affairs together with the Employee.
c. The Insurance Intermediary may combine its activities with reinsurance brokerage activities and insurance consultancy activities, provided that all provisions of these Instructions and decisions are met, without receiving any fees, commissions, or material benefits from the insurance company or the reinsurance company or the client regarding the subject of insurance.
d. The Insurance Intermediary may not combine its activities with those of any other insurance service providers, subject to the provisions of paragraph (c) of this Article. e. Notwithstanding the matters mentioned in paragraph (c) of this Article, the practice of brokerage activities in insurance specified in the contracts and coverages mentioned above may be practiced before the Person in Charge of Brokerage Activities or the Manager of Insurance Affairs or the Employee of the same type of insurance. f. It is prohibited for the Manager of Insurance Affairs and the Person in Charge of Brokerage Activities and the Employee at the Insurance Intermediary to:

1. Perform executive activities in another company or insurance company that practices other activities or any insurance service providers.
2. Be a partner or owner in another company that practices insurance brokerage activities in the same type of insurance.

Article (4)
General Conditions for Licensing Insurance Intermediary The following conditions are required for licensing the Insurance Intermediary:
a. It must be a Jordanian company registered with the competent authorities or a branch of a foreign company, in accordance with the relevant legislation. b. The company type must be a joint stock company (public or private) or a limited liability company.
c. Its capital must not be less than:
1. 5,000 JOD for each branch of insurance type, up to a maximum of 6 branches of the same insurance type.
2. 7,500 JOD for each branch of insurance type, up to a maximum of 12 branches of the same insurance type.
3. 10,000 JOD for each branch of insurance type, up to a maximum of more than 12 branches of the same insurance type.
d. Subject to the provisions of paragraph (c) of Article (3) of these Instructions, the person whose license is requested to practice insurance brokerage activities may be authorized to practice additional insurance brokerage activities related to the licensed insurance in the Kingdom. e. The Manager of Insurance Affairs must be the person authorized to sign on behalf of the Insurance Affairs. f. He must practice his activities through a suitable office in the Kingdom. g. His name must indicate the activities he practices, i.e., insurance brokerage. h. His license must not have been suspended or canceled for practicing insurance brokerage activities or any insurance service providers as an administrative penalty, unless the conditions for re-registration or re-licensing are met by the authority that suspended or canceled his license.
i. The following conditions must be met by the owners, partners, members of the Board of Directors, and the General Manager of the Intermediary:
1. Their license or approval to practice brokerage activities must not have been suspended or canceled for practicing insurance brokerage activities or any insurance service providers as an administrative penalty, whether as a natural person or as a Manager of Insurance Affairs, Person in Charge of Brokerage Activities, Partner in Joint Stock Companies, Shareholder in Limited Liability Companies, or Owner, unless the conditions for re-registration or re-licensing are met by the authority that suspended or canceled his license, and information regarding his liability in the legal person was not available, or he was a member of the Board of Directors or a member of the Board of Managers or an authorized signatory.
2. No final criminal judgment has been issued against him for a crime or misdemeanor involving moral turpitude or bankruptcy or insolvency proceedings, unless he has been restored to his status.
3. He must not be considered responsible for any serious violation of the provisions of the legislation related to financial activities, according to the discretion of the Governor.
k. The conditions specified in these Instructions must be met for the proposed name of the Manager of Insurance Affairs.
l. In addition to the conditions mentioned in paragraphs (y)-(a) of this Article, the following conditions must be met by the license applicant if it is a branch of a foreign company:
1. It must be licensed as an insurance intermediary in the country of its headquarters, and its license must cover the branches of insurance for which its license is requested in the Kingdom.
2. It may have practiced insurance brokerage activities in the branches of insurance in the country of its headquarters for a period not less than two years.
3. It must enjoy a good reputation.

Article (5)
General Conditions for Manager of Insurance Affairs and Person in Charge of Brokerage Activities and Employees The Manager of Insurance Affairs, the Person in Charge of Brokerage Activities, and the Employee must meet the following general conditions:
a. He must be a resident in the Kingdom. b. His license or approval to practice insurance brokerage activities must not have been suspended or canceled for practicing insurance brokerage activities or any insurance service providers as an administrative penalty, whether as a natural person or as a Manager of Insurance Affairs, Person in Charge of Brokerage Activities, Partner in Joint Stock Companies, Shareholder in Limited Liability Companies, or Owner, unless the conditions for re-registration or re-licensing are met by the authority that suspended or canceled his license, and information regarding his liability in the legal person was not available, or he was a member of the Board of Directors or a member of the Board of Managers or an authorized signatory.
c. No final criminal judgment has been issued against him for a crime or misdemeanor involving moral turpitude or bankruptcy or insolvency proceedings, unless he has been restored to his status.
d. He must not be considered responsible for any serious violation of the provisions of the legislation related to financial activities, according to the discretion of the Governor.

Article (6)
Conditions for Approval of Manager of Insurance Affairs The Manager of Insurance Affairs at the Insurance Intermediary must meet the following conditions:
a.1. He must hold at least a Bachelor's degree or equivalent.
1. He must hold a professional certification in insurance specialized in the type of insurance for which approval is sought, from an approved authority regarding the portfolios, for the branches of life insurance and/or general insurance, and/or investment-related branches, and/or collective pension funds management branches.
a. He must hold at least a Bachelor's degree in insurance, economics, finance, accounting, actuarial sciences, or any other approved specialties regarding the portfolios, or risk management. b. He must hold a professional certification in life insurance, financial securities, investment, or financial services, or wealth management, or any other professional certification related to his work from approved authorities regarding the portfolios.
2. He must have any of the following practical experiences, accompanied by evidence of social security subscription:
a. He practiced insurance activities at an insurance company or/and insurance service providers for a period not less than seven years in the type of insurance for which approval is sought, and his experience includes his experience in the branches of insurance for which approval is sought. b. He worked as a General Manager at a reinsurance company or insurance company in the type of insurance for which approval is sought.
c. He worked as a Senior Employee at a reinsurance company or insurance company for a period not less than two years in the type of insurance for which approval is sought, provided that his experience includes his experience in the branches of insurance for which approval is sought.
3. He must pass the examination prepared or approved by the Central Bank for this purpose.
4. He must be a licensed Insurance Intermediary.
5. He must submit a request for approval to add the branches of insurance for which the applicant seeks approval simultaneously.
6. He must have attended specialized courses during the year preceding the date of submission of the approval request, with a duration not less than 105 hours in insurance activities or insurance activities, if there was a gap in practicing insurance activities or insurance activities for a period exceeding two years.
b. The applicant for approval is exempt from the condition specified in paragraph (1) of clause (a) of this Article if he has any of the following:
1. Practical experience exceeding the period of the required experience by at least three years, provided that he holds at least a General Secondary Certificate.
2. Practical experience not less than ten years in insurance activities or/and insurance service providers, provided that his total experience does not exceed ten years.
c. The periods mentioned in paragraph (2) of clause (b) are reduced by two years if the applicant for approval holds any of the following:
1. Professional certifications in insurance related to the type of insurance for which approval is sought, from an approved authority regarding the portfolios, provided that he holds at least a Bachelor's degree.
2. One of the professional certifications mentioned in paragraph (1) of clause (b/1) of this Article, provided that the applicant for approval in life insurance holds at least a Bachelor's degree.
3. A Master's or Doctorate degree in insurance, risk management, economics, finance, accounting, or actuarial sciences, or any other approved specialties regarding the portfolios.
d. The applicant for approval is exempt from submitting the examination mentioned in paragraph (3) of clause (a) of this Article if he previously obtained a license as a natural person Insurance Intermediary or approval as a Person in Charge of Brokerage Activities or Manager of Insurance Affairs, and more than two years have passed since the date of cancellation or suspension of his approval or license, within the limits of the approved or licensed insurance branches.

Article (7)
Conditions for Approval of Person in Charge of Brokerage Activities The Person in Charge of Brokerage Activities at the Insurance Intermediary must meet the following conditions:
a.1. He must hold at least a Bachelor's degree or equivalent.
1. He must hold a professional certification in insurance specialized in the type of insurance for which the license is sought, from an approved authority regarding the portfolios, for the branches of life insurance and/or general insurance, and/or investment-related branches, and/or collective pension funds management branches.
a. He must hold at least a Bachelor's degree in insurance, economics, finance, accounting, actuarial sciences, or any other similar approved specialties regarding the portfolios, or risk management. b. He must hold professional certifications in life insurance, financial securities, investment, or financial services, or wealth management, or any other professional certification related to his work from approved authorities regarding the portfolios.
2. He must have any of the following practical experiences, accompanied by evidence of social security subscription:
a. He practiced insurance activities at an insurance company or/and insurance service providers for a period not less than three years in the type of insurance for which approval is sought, and his experience includes his experience in the branches of insurance for which approval is sought. b. He worked as a Manager at a reinsurance company or insurance company in the type of insurance for which approval is sought.
c. He worked as a Senior Employee at a reinsurance company or insurance company for a period not less than two years in the type of insurance for which approval is sought, provided that his experience includes his experience in the branches of insurance for which approval is sought.
3. He must pass the examination prepared or approved by the Central Bank for this purpose.
4. He must be a licensed Insurance Intermediary.
5. The Insurance Intermediary may submit a request to add the related insurance branches to his license simultaneously.
6. He must have attended specialized courses during the year preceding the date of submission of the license request, with a duration not less than 105 hours in insurance activities or insurance activities, if there was a gap in practicing insurance activities or insurance activities for a period exceeding two years.
b. The applicant for approval is exempt from the condition specified in paragraph (1) of clause (a) of this Article if he has any of the following:
1. Practical experience exceeding the period of the required experience by at least three years, provided that he holds at least a General Secondary Certificate.
2. Practical experience not less than ten years in insurance activities or/and insurance service providers.
c. The periods mentioned in paragraph (2) of this clause are reduced by one year if the applicant for approval holds any of the following:
1. Professional certifications in insurance related to the type of insurance for which approval is sought, from an approved authority regarding the portfolios, provided that he holds at least a Bachelor's degree.
2. One of the professional certifications mentioned in paragraph (1) of clause (b/1) of this Article, provided that the applicant for approval in life insurance holds at least a Bachelor's degree.
3. A Master's or Doctorate degree in insurance, risk management, economics, finance, accounting, or actuarial sciences, or any other approved specialties regarding the portfolios.
d. The applicant for approval is exempt from submitting the examination mentioned in paragraph (3) of clause (a) of this Article if he previously obtained a license as a natural person Insurance Intermediary or approval as a Person in Charge of Brokerage Activities or Manager of Insurance Affairs, and more than two years have passed since the date of cancellation or suspension of his approval or license, within the limits of the approved or licensed insurance branches.

Article (8)
Application for Insurance Intermediary License a. The application for a license to practice brokerage activities is submitted using the form prepared for this purpose, containing the following data and supporting documents required by the Governor's decision according to the legislation issued in the Kingdom:
1. The type of insurance and branches for which the practice of brokerage activities is requested.
2. The amount of capital.
3. The application for approval of the proposed person for the position of Manager of Insurance Affairs, using the form prepared for this purpose.
4. The application for approval of the proposed persons for the position of Person in Charge of Brokerage Activities, using the form prepared for this purpose, as applicable.
5. A signed copy of the company's articles of association or the basic contract.
6. Detailed data about the founding partners, including their names, the amount of their shares or contributions, and a certified copy of their national ID cards (for Jordanians) or passports, and a certificate of non-criminal record and ownership in any insurance companies or companies practicing other activities or any insurance service providers.
7. The proposed names of the members of the Board of Directors and the Management Board, if any.
8. Proof of payment of the prescribed fees and dues.
9. The request for studying the license application is subject to verification of the fulfillment of the conditions and requirements specified in these Instructions and any other relevant legislation, and the submission of any other documents or data.
b. In addition to the documents mentioned in clause (a) of this Article, the license applicant if it is a branch of a foreign company must submit the following:
1. A certified certificate of the foreign company's license as an insurance intermediary issued by the supervisory authority in the country of its headquarters.
2. A certificate of non-objection from the supervisory authority in the country of its headquarters to open a branch in the Kingdom.
3. A copy of the audited financial statements for the last two years, attached, according to assets.

Article (9)
Procedures for Insurance Intermediary License a. The applicant is notified of any deficiency in the submitted data and supporting documents within a period not exceeding twenty working days from the date of submission of the request. If the deficiency exists, the applicant must complete the deficiency within a period not exceeding three months from the date of notification. Otherwise, the request is considered canceled, and the applicant may not submit a new request within six months from the date of cancellation of the request. b. The applicant for approval as a Person in Charge of Brokerage Activities or Manager of Insurance Affairs is subject to an examination within a period not exceeding sixty working days from the date of notification to the applicant of the completion of the request according to clause (a) of this Article. The applicant is notified of the examination results.
c. The Governor decides on the license request within a period not exceeding sixty working days. He may grant preliminary approval to the applicant to complete the requirements, or reject the request if it appears that there are negative or adverse impacts on the insurance sector, without stating the reasons for rejection to the Jordanian applicant.
d. Upon the issuance of the Governor's decision granting preliminary approval to the applicant, the applicant must submit, within a period not exceeding three months from the date of notification of the preliminary approval, proof of the following:

1. Completion of establishment procedures and registration with the competent authorities in the Kingdom, and payment of the prescribed fees and dues according to the legislation issued for this purpose.
2. Completion of the appointment procedures for the proposed person for the position of Manager of Insurance Affairs, meeting the requirements.
3. Obtaining an insurance contract to cover his professional liability as an insurance intermediary during the license period. The value and conditions of this contract are determined by a decision issued by the Governor for this purpose.
4. A copy of the ownership document or lease contract for the specific office.
5. Proof of payment of the prescribed fees and dues.
   e. Upon completion of the requirements by the applicant within the period mentioned in clause (d) of this Article, the license is granted for a period of three years ending on the 31st of Rabi' al-Thani, and the year is considered the Hijri year part. The license is registered in the Special Register prepared for this purpose. f. If the applicant fails to complete the requirements within the period mentioned in clause (d) of this Article, the request is considered canceled, and the applicant may not submit a new request within six months from the date of cancellation of the request. g. If the applicant fails to pass the examination mentioned in clause (b) of this Article, the applicant is notified thereof, and he has the right to retake the examination up to two times after paying the prescribed dues, within six months from the date of submission of his request. The approval request submitted by the applicant is not canceled, and he may submit a new request for approval as a Person in Charge of Brokerage Activities or Manager of Insurance Affairs in the Kingdom after one year, providing proof of his attendance in specialized courses in insurance activities or insurance activities with a duration not less than 105 hours, using the form prepared for this purpose, and a new application for approval of the Manager of Insurance Affairs at the company that submitted the license request.

Article (10)
Changes to Data and Information a. The Insurance Intermediary must not make any changes that affect the conditions on which the license was granted, without obtaining prior approval from the Governor, and must not make any changes to the company's record at the Companies Control Department without prior approval from the Governor, under legal liability. b. The Insurance Intermediary must notify the Central Bank of any suspension of his activities in practicing his activities in any office inside or outside the Kingdom, with prior approval from the Governor.
c. The Insurance Intermediary must notify the Central Bank of any vacancy in the position of the Manager of Insurance Affairs, and he must fill any vacancy in the position of the Manager of Insurance Affairs, the Persons in Charge of Brokerage Activities, or the Employees within sixty days from the date of the vacancy, after obtaining the prior approval of the Governor in accordance with the provisions of these Instructions and the issued decisions.
d. The Insurance Intermediary may not practice insurance brokerage activities during the period of absence of the Manager of Insurance Affairs. However, he may continue practicing brokerage activities in the insurance branch he has, provided that there is a Person in Charge of Brokerage Activities at the Manager of Insurance Affairs' position, within a period of sixty days from the date of the vacancy in the position of the Manager of Insurance Affairs, regarding the branches of insurance related to the type.

Article (11)
Periodic Data
The Insurance Intermediary must periodically provide the Central Bank with:
a. His annual budget and audited accounts attached, within a period not exceeding the end of March of each year, following the accounting policies decided by the Governor for the issuance of the necessary forms and presentation of the financial data and reports. b. A statement of the insurance brokerage activities practiced during the year, according to the forms issued by the Governor's decision.

Article (12)
License Renewal

a) An insurance intermediary must submit a request to renew their license no later than 45 days before the expiration of the license term, accompanied by the required documents according to the form issued by the Governor's decision.

b) The period for submitting a license renewal request must not exceed 30 working days from the date of submission of all complete renewal data and supporting documents.

Article (13)
Addition of Insurance Branches

a) An insurance intermediary wishing to add a branch to the license granted to them must submit a request according to the form issued by the Governor's decision to the Central Bank, subject to the following conditions:

b) The insurance intermediary is granted approval to add the branch if:

1. The conditions specified in these Instructions for the approval of the Director of Insurance Affairs to practice mediation activities through this branch are met.

2. The intermediary pays the prescribed fees and dues according to the legislation issued for this purpose and the Law.

c) The Director of Insurance Affairs approves the intermediary's activities on additional branches according to the following conditions:

1. Submission of a request according to the form issued by the Governor's decision.

2. The intermediary meets the conditions specified in Articles (6) and (7) of these Instructions.

3. The intermediary passes the examination prepared or approved by the Central Bank for this purpose.

4. The intermediary pays the prescribed fees and dues according to the legislation issued for this purpose and the Law.

d) The license for additional branches is granted in accordance with the duration of the license granted to the insurance intermediary.

e) The provisions of Article (9) of these Instructions apply to the request submitted to add a branch to the license, as appropriate for the intermediary.

Article (14)
Requirements for Opening Branches

a) An insurance intermediary may open more than one branch within the Kingdom, provided they obtain prior approval from the Governor according to the form issued by the Governor's decision.

b) An insurance intermediary wishing to open more than five branches within the Kingdom or open branches outside the Kingdom must submit a request according to the form issued by the Governor's decision and obtain the Governor's approval, subject to the requirements specified in the decision issued by the Governor as follows:

1. Three years must have passed from the date of their license to practice mediation activities in insurance.

2. Their capital must not be less than 50,000 Dinars.

3. They must have achieved operational profits during the two preceding years of submission of the request.

4. The company type must be a joint-stock company or a limited liability company.

c) For the purposes of granting approval to the insurance intermediary to open a branch, the following conditions must be met:

1. The total number of insurance intermediaries practicing mediation activities under the Director of Insurance Affairs must not be less than the number of branches.

2. The Central Bank must be provided with a copy of the ownership document or lease contract for the address of the branch to be opened, and the Bank must verify the suitability of the branch's location.

3. No administrative penalty or financial fine must have been issued against the intermediary during the two preceding years of submission of the request, as a result of violating any provisions of the Law or the Instructions issued pursuant thereto.

4. The intermediary must pay the prescribed fees and dues according to the legislation issued for this purpose and the Law.

Article (15)
Duties of the Insurance Intermediary

The insurance intermediary must commit to the following:

a) Fixing their registration number with the Central Bank on all their papers, documents, correspondence, and announcements.

b) Clearly indicating in all their papers, documents, correspondence, and announcements, at their headquarters and branches, the nature of their work as an insurance intermediary.

c) Adhering to the practice of insurance intermediary activities within the limits of their license and classification.

d) Practicing their activities within their licensed headquarters; they are not allowed to practice their activities at any other location without prior written approval from the Governor to change or suspend activities inside or outside the Kingdom.

e) Entering into an agreement with each insurance company they deal with, containing the terms and conditions agreed upon, such that this agreement remains valid throughout the period of their dealings with the company, including the following minimums:

1. The type of insurance and branches for which the intermediary is allowed to practice.

2. The cases in which the insurance intermediary is allowed to collect insurance premiums for the insurance company.

3. The mechanism for calculating the intermediary's commission for each insurance branch.

4. The principles the intermediary must follow and commit to.

5. The duration of the agreement.

6. The cases leading to the cancellation of the agreement.

w) Providing technical advice and consultation to the client, observing the provision of advice and consultation to obtain the best conditions and prices for the client's requirements and capabilities, and ensuring contact through a sufficient number of insurance companies not less than three third-party companies to obtain offers on behalf of the client, unless the intermediary proves in their register that they are exempt from this obligation in the following cases:

1. When renewing individual medical insurance contracts.

2. When renewing group medical insurance contracts, up to a maximum of three consecutive years.

3. In insurance contracts with defined benefits and coverages.

4. In vehicle insurance contracts, with a maximum annual premium of 1,000 Dinars per contract, provided that the intermediary does not accept less than three underwriting policies from insurance companies.

5. If the client explicitly expresses their unwillingness to obtain offers from multiple insurance companies, the intermediary may rely on presenting an offer from a specific insurance company.

z) Negotiating with the insurance company on behalf of the client, provided they obtain the client's written authorization to represent them before the company.

h) Providing information to the insurance company to enable it to assess the required risk or renew the client's insurance, with the client's knowledge and consent.

t) Keeping abreast of developments in insurance markets and knowing the applied legislation and its implications on insurance and mediation activities.

y) Assisting in negotiations between the client and the company regarding claims and disputes resulting from the occurrence of the insured risk.

k) Not allowing other insurance intermediaries to perform insurance mediation activities on behalf of the client without obtaining the client's written consent, and ensuring compliance with the following:

1. Signing an agreement specifying the shared mediation conditions between the intermediaries, including their duties, responsibilities, and the mechanism for sharing fees or commissions.

2. Disclosing to the insurance company the shared mediation.

3. Shared mediation is not permitted for individual insurance activities.

l) Exercising full supervision over the insurance intermediary and the activities of those practicing mediation under the Director of Insurance Affairs, and the intermediary is responsible for the actions of the Director of Insurance Affairs and their employees under their supervision.

m) Not entrusting anyone other than themselves to practice any part or all of the insurance mediation activities, unless they are licensed, and in accordance with the provisions of these Instructions and the decisions and instructions issued pursuant thereto.

n) Providing a suitable mechanism for supervising branch activities and providing a safe and appropriate mechanism for preserving funds.

s) The intermediary is allowed to deposit any amounts received from the client as premiums directly into the insurance company's account or transfer these amounts to a special bank account opened by the intermediary for this purpose, called "Insurance Mediation Account," within a period not exceeding seven working days from the date of receipt, according to the agreement. The intermediary may deduct their commission from these amounts on the insurance company account within a shorter period if agreed upon in the mediation agreement with the insurance company.

' (Note: Arabic letter 'Ain') In the event of non-payment by the insured to the intermediary, the intermediary must make every effort to collect the necessary premiums from the insured and immediately notify the insurance company.

f) Depositing claim amounts paid by the insurance company to the beneficiary or on behalf of the client into a special bank account opened by the intermediary in the Kingdom, and transferring them to their rightful owners in the agreed manner within a period not exceeding seven working days from the date of receipt, according to the agreement, or within the shortest period agreed upon in the mediation agreement.

s (Note: Arabic letter 'Sad') The intermediary must maintain complete separation between their personal accounts and the accounts related to their insurance mediation activity, and not use the accounts mentioned in paragraphs (f) and (s) of this Article for any purpose other than that specified, such as obtaining any guarantee, loan, or repayment. In the event of the intermediary's bankruptcy, no benefit or interest is derived from these accounts, and funds are not used in them to pay creditors.

q) The intermediary must refrain from issuing insurance contracts with temporary coverage notes, except by delivering a temporary coverage note to the client, which must be signed and stamped only by the insurance company, and delivered within two weeks from the date of the original contract.

r) Disclosing to the client any fees or commissions related to the insurance contract charged by the insurance intermediary, according to the mechanism approved by the Governor, whether the expense is borne by the insurance company or the client.

sh) Keeping the necessary documents submitted by the insurance applicant when requesting insurance from the insurance company, and upon request by the insurance company later, providing any other documents specified with them, according to the arrangements specified with the insurance company.

t) Providing the Central Bank with a copy of any financial data, information, documents, or correspondence submitted by the insurance intermediary to the Ministry of Industry, Commerce and Supply or the Insurance Supervisor and/or any other relevant authorities, and any information or data received by the insurance intermediary from those authorities.

th) Continuously updating skills and knowledge in the insurance field and keeping abreast of insurance products and services available in the markets, participating in at least the minimum number of insurance and services courses specialized in insurance or insurance mediation offered by the Director of Insurance Affairs, or seminars or conferences in insurance or insurance mediation with a duration not less than fifteen hours annually.

kh) If the intermediary relies on a limited number of insurance companies in practicing their activity, and the percentage of commission from any company exceeds 35%, or they deal with fewer than three companies during the year, the intermediary must provide justified reasons for the total commissions from all insurance companies to the Central Bank.

Article (16)
Rules and Ethics of the Profession

The intermediary must commit to rules and ethics of the profession practiced as follows:

a) Commitment to integrity, honesty, and trustworthiness in all their actions and conduct at all times.

b) Observing appropriate times and circumstances to contact the insurance applicant or the insured.

c) Ensuring the client understands the nature of the relationship between them and the type of service provided to them, and showing them a copy of their license if requested.

d) Dealing with all information and data obtained during their work, whether from the company or the client, with utmost confidentiality and taking appropriate measures to maintain the confidentiality of information and contracts.

e) Verifying that the insurance contract issued by the company meets the client's requirements and conforms with their capabilities.

w) Explaining to the client the importance of disclosing all basic and fundamental information when filling out the request, and the consequences of providing any document or insurance data with inaccuracy or concealment, and clarifying to the client that they are solely responsible for the information and data provided by them.

z) Explaining to the client the reason for choosing the insurance contract presented to them, including its terms and benefits, and providing them with a comparison between the proposed insurance contract price and coverage, and exceptions, and clarifying the names of other insurance companies offering other insurance contracts or participating in the proposed insurance coverage.

h) Determining the validity period for presenting prices to the client.

t) Disclosing to the insurance applicant all necessary information about them to obtain the true image of the insurance applicant for the requested insurance coverages.

y) The commission percentage granted by the company to the intermediary must not be the main influencing factor in the intermediary's recommendation of a specific insurance company over others.

k) Informing the insurance company of any information provided to the insurance applicant regarding documents and policies that may affect the acceptance or rejection of the application, and disclosing any conflict of interest, including marriage, employment, or kinship up to the second degree, with the Director of Insurance Affairs, the Board of Directors, or any director, or with employees of the intermediary or those practicing mediation activities, or with the insurance applicant.

l) Explaining to the client the mechanism for paying premiums and any additional fees and dues related to the insurance contract, and any special conditions attached to it.

m) The insurance intermediary must refrain from doing any of the following:

1. Influencing the insurance applicant to accept or reject an insurance offer presented to them based on incorrect data or data conflicting with the interests and requirements of the insurance applicant.

2. Providing misleading or incorrect information to the insurance applicant about insurance coverages or insurance companies offered.

3. Recommending or choosing an insurance offer for a specific insurance company for the client based on the commission percentage granted by the company to the intermediary, in a manner conflicting with the interests and requirements of the insurance applicant.

4. Cancelling an insurance contract concluded with another insurance company for the purpose of obtaining a commission from the insured for the program presented by them.

5. Providing the client with incorrect or unfair criticisms or information about any intermediary or company, or urging the client to cancel a valid insurance contract to purchase a new contract through another party to influence the offer presented to the client.

6. Practicing insurance mediation activities for the same insurance location or insurance contract for which the client has sought consultation, without informing the client about it.

7. Obtaining any material compensation, fees, or commission from the insurance company or the insured client in the same location for performing their tasks regarding the insured risk or insurance, acting as both an insurance intermediary and an insurance consultant.

n) Explaining to the client the procedures they must follow in the event of the occurrence of the insured risk, and their obligation to notify about the claim immediately.

s) Ensuring the client knows the expiration date of the insurance contract, even if an agreement is reached between the client and the intermediary, and the intermediary must not provide services related to renewing the insurance contract after.

' (Note: Arabic letter 'Ain') Providing advice to the client about the necessity of disclosing any changes in the nature of the risk insured after, and if the intermediary provided services to the client during the validity and issuance of the insurance contract, they must advise them specifically about renewing the insurance contract.

f) Ensuring the client receives notice from the insurance company to renew the insurance contract at a suitable date before the expiration date, such that it is received from the client at least one month before the expiration of the insurance contract, and the intermediary must provide services related to renewing the insurance contract.

s (Note: Arabic letter 'Sad') Notifying the client without delay of the company's decision regarding the claim and the procedures related to it, and providing the client with appropriate assistance to continue the procedures after the occurrence of the risk insured, and advising the client to provide full and fair disclosure regarding the claim submitted by the client to the company, and in the event that the client is aware of their non-compliance with the obligation, the intermediary must not stop working on behalf of the client regarding the claim.

r) Ensuring that the renewal and requirements of the insurance contract contain information about the specific procedures, and noting any observations or complaints the client has about the insurance contract.

sh) Explaining to the client the mechanism for submitting complaints, whether to the Central Bank or the relevant insurance company, and keeping a special register for complaints submitted to follow up on them.

t) Taking necessary measures to determine conflict of interest situations and dealing with them, and ensuring fair dealing with all clients.

th) Providing an internal control policy for branch operations, as well as a policy for preserving funds within branches, including a system for recording data and information, and preserving funds, including all information related to clients within branches.

kh) Ensuring that advertisements issued are not misleading, unclear, or contain amounts or violations, and must not be limited to one insurance company, and if the advertisement is specific to an insurance company, it must obtain its approval.

Article (17)
Duties of the Insurance Company

The insurance company must commit to the following:

a) Including in the insurance offer, within the insurance contract schedule and/or the premium calculation schedule, a reference to the registration number or name of the intermediary/insurance intermediary related to the insurance.

b) Informing the Central Bank immediately upon becoming aware of any violation committed by any insurance intermediary or by any action that may lead to the cancellation of their license with the Central Bank.

c) Paying the intermediary's commissions and fees due within a period not exceeding seven working days from the end of the month in which the insurance premiums were provided, and the "unearned premium" period shall be considered the end of the month specified in the instructions for documents.

d) Not conducting direct communications with the client based on the client authorized by the insurance intermediary, provided that in this case, the insurance company does not give the insurance intermediary a reduction in premiums or prices, and does not give the client discounts for the purpose of recovering the intermediary's commission.

e) Not providing different prices or terms for the same insurance operation, unless different information was provided, unless the insurance company's decision is based on it.

w) Any attempt by the insurance company to avoid dealing with the intermediary and directly with the client is considered a violation and is prohibited, as the intermediary is authorized to perform the mediation role.

Article (18)
Insurance Intermediary Registers

a) The insurance intermediary must keep organized registers and books of assets according to the data and records, including the information and papers related to the insurance mediation activities practiced in them, and the records as follows:

1. Agreements signed with insurance companies.

2. The name and address of the client for whom the intermediary practices insurance mediation activities.

3. The agreement concluded between the client and the insurance intermediary.

4. Memos and correspondence related to their activities.

5. Insurance requests and documents received from the client.

6. Names of clients and the date of issuing the insurance contract and the paid premiums.

7. Copies of insurance contracts concluded with the client and amendments to the insurance company, containing what is mentioned in items (5) and (6) of this paragraph.

8. Documents with sequential numbers related to receipts, payments, and settlements.

9. Bank accounts related to the insurance mediation activities practiced.

b) The registers and books mentioned in paragraph (a) of this Article must be in original paper form or copies thereof, or through other electronic preservation methods.

c) The intermediary must keep the records and books mentioned in this Article for a period not less than five years from the expiration date of the insurance contract, and for a period not less than one year in cases related to insurance requests for which no insurance contract is issued.

d) Complete separation must be maintained in the insurance intermediary's records between the financial and technical aspects specific to each type of insurance.

Article (19)
Suspension of License

a) The suspension of the insurance intermediary's license is done upon their request for a specified date from the date of their request.

b) The insurance intermediary whose license has been suspended according to the provisions of paragraph (a) of this Article may submit a request to reinstate their registration in the Special Register issued by the Governor's decision, accompanied by the required papers and data, subject to the following provisions:

1. If the license suspension period does not exceed one year from the date of submission of the request, the provisions of Article (9) of these Instructions apply.

2. If the license suspension period exceeds one year from the date of submission of the request, the intermediary must, in addition to what is stated in item (1) of paragraph (b) of this Article, prove their participation in courses specialized in insurance or insurance mediation, or seminars or conferences in insurance or insurance mediation, with a duration not less than fifteen hours, during the year preceding the submission of the request.

3. If the license suspension period exceeds two years from the date of submission of the request, it is considered a new license request, and the intermediary must submit a new license request according to the provisions of these Instructions.

Article (20)
Inspection of the Insurance Intermediary

a) The insurance intermediary is subject to inspection by the Central Bank or any authority appointed by the Governor for this purpose, and the insurance intermediary must cooperate with them in performing their activities according to the assets.

b) The inspectors of the Central Bank or the authority appointed by the Governor under paragraph (a) may visit offices, examine their registers, accounts, and documents, and take all necessary procedures to verify that their activities and operations do not conflict with the provisions of the Law, regulations, and instructions issued pursuant thereto.

Article (21)
Administrative and Disciplinary Penalties

a) The Governor must take any of the procedures specified in paragraph (b) of this Article if they have sufficient information indicating:

1. That the insurance intermediary, or the Director of Insurance Affairs or those practicing mediation activities under them, or their employees have violated any provisions of the Law, regulations, instructions, or decisions issued pursuant thereto.

2. That the insurance intermediary, or the Director of Insurance Affairs or those practicing mediation activities under them, have failed to meet any conditions under which their license or approval was granted, or that the supporting documents or data upon which their license or approval was granted are found to be untrue.

3. That the insurance intermediary has breached trust regarding the funds kept by them belonging to the insurance company, the insurance applicant, or the insured.

4. That the insurance intermediary has not cooperated with any inquiry or inspection conducted by the Central Bank.

5. That the insurance intermediary has not complied with resolving customer complaints or submitting a response to the Central Bank within the specified deadline.

6. That the insurance intermediary has not paid the annual fees within the specified deadline.

7. That the insurance intermediary has not provided the Central Bank with the required data within the specified deadline.

8. That the insurance intermediary has practiced mediation activities in branches not licensed by the insurance company.

9. That the insurance intermediary has continued to practice their activities despite the cancellation, suspension, or expiration of their license.

10. That the insurance intermediary has not practiced their activities for more than one year, or has not practiced mediation activities in their licensed branches for more than one year.

11. That the financial situation of the insurance intermediary has deteriorated to the extent that it affects their ability to continue practicing their activities.

12. That the insurance intermediary has failed to maintain the capital requirements, and the net worth of the property has decreased, as confirmed in the last audited financial statements by more than 50% of the required capital value.

13. That the insurance intermediary has simple partners, shareholders, or owners in joint liability companies, and a final criminal judgment has been issued against them for a crime involving dishonor or breach of trust, or they are subject to bankruptcy or insolvency procedures, or have not been restored to their good standing.

14. That the insurance intermediary is subject to bankruptcy or insolvency procedures, or has not been restored to their good standing.

b) To implement the provisions of paragraph (a) of this Article, the Governor, considering the seriousness of the violation, may take more than one of the following procedures:

1. Issuing a written warning to the insurance intermediary.

2. Requesting the intermediary to take specific procedures to correct their situation within a specified period.

3. Suspending the approval of the Director of Insurance Affairs or those practicing mediation activities under them.

4. Suspending the license of the insurance intermediary in all the insurance branches licensed to practice their activities, for the duration they deem appropriate.

5. Cancelling or suspending the license of the insurance intermediary in more than one branch, inside or outside the Kingdom, for the duration they deem appropriate, during which they are not allowed to practice their activities in the licensed branches.

6. Cancelling the license of the insurance intermediary in all the insurance branches licensed to practice their activities, or any of them.

c) If a decision is issued to cancel the intermediary's license due to a serious breach, the intermediary is not allowed to submit a request for a new license to practice mediation activities in the Kingdom until three years have passed from the date of issuance of the license cancellation decision.

d) In addition to the cases mentioned in paragraph (a) of this Article regarding the suspension or cancellation of the branch license by the Governor, any of the following cases apply to the foreign company:

1. If the parent company stops practicing mediation activities in insurance in its main center.

2. If any change occurs in the nationality of the parent company, or its ownership, or its basic system or establishment, and this change affects the branch, according to the Central Bank's discretion.

3. If a fundamental weakness occurs in the financial position of the parent company, or any fundamental change that the Central Bank believes negatively affects the branch's activity or the smooth conduct of the foreign company's activities in the Kingdom.

4. If it is established that the competent authorities in the country of the main center do not apply the principles of sound supervision in insurance activities.

5. If the license of the foreign company's branch is cancelled, the parent company or the branch is not allowed to convert any of the branch's assets or funds to outside the Kingdom after settling all obligations incurred within the Kingdom.

Article (22)
General Provisions

a) For the purposes of these Instructions, the financial year of the intermediary begins on the first of January and ends on the thirty-first of December of the same year, except for the first year of their license, which begins on the first of January and ends on the thirty-first of December of the year the license was granted to the intermediary.

b) The Governor determines the principles for calculating insurance intermediary commissions.

c) The insurance intermediary whose license has been suspended or cancelled according to the provisions of these Instructions must take the necessary and immediate procedures to close their main office, during which they are not allowed to practice their activities.

d) The intermediary is not allowed to practice insurance mediation activities during the suspension period or after the cancellation of their license, under legal liability.

(c) Despite what was stated in the paragraph, the broker must suspend or cancel the license for services related to insurance contracts concluded during the period, for a maximum duration of one month prior to the suspension or cancellation date. During this suspension or cancellation period, the broker must take appropriate arrangements to follow up on insurance contracts with the relevant insurance company, without the client's consent.

• (w) The broker must take the necessary procedures to delete the broker's license for the purposes of the company, within a maximum period of three months from the date:

  1. Cancellation of the insurance broker license.
  2. Two years have passed since the suspension of the insurance broker license.

• (z) Any applicant for an insurance broker license who fails to comply with the provisions of these Instructions shall not be considered, provided they complete the procedures to rectify their situation and pay all decisions issued against them by the Central Bank in accordance with the provisions of the Law, and any other decisions issued against them and fines imposed thereon.

• (h) An insurance broker who was previously licensed as an insurance agent shall not practice insurance brokerage for 30 days from the date of termination of the agency contract with the insurance company.

Article 23:

Regularization of Situations

(a) Every person licensed to practice brokerage activities must regularize their situation in accordance with these Instructions within a period not exceeding one year from the date of their enforcement, under the threat of license cancellation.

(b) An insurance broker licensed before the issuance of these Instructions is considered licensed until the date of renewal or expiration of their license issued by the Central Bank, and must regularize their situation before submitting an application for license renewal in accordance with the provisions of these Instructions.

(c) In cases concerning a person licensed as an insurance broker before the issuance of these Instructions:

1. Their license as an insurance broker expires on the date of renewal or expiration of the license issued by the Central Bank.
2. In cases concerning a broker who is suspended or whose license is not renewed, they submit a request for renewal and/or re-registration. The license is renewed before the end of the regularization period stipulated in these Instructions, for a period not exceeding thirty-one days from the first of January of the same year, and in any case, for a maximum duration of one year from the end of the regularization period.
3. If they are exempted from the conditions stipulated in Articles (6) and (7) of these Instructions, for the purpose of approving them as branch managers within the limits of the licensed insurance branches, the insurance broker must submit a request for approval during the regularization period stipulated in paragraph (a) of this Article.
4. The special conditions for adding branches apply to them for the purpose of approving them as branch managers, as stipulated in these Instructions.

(d) In cases concerning requests submitted before the issuance of these Instructions, which are not resolved by a final decision, and provided they complete the procedures to meet the conditions mentioned within the effective Instructions, a decision is issued on them within a period not exceeding three months from the issuance of these Instructions.

(e) The person approved to work as a manager in the administration before the issuance of these Instructions is exempted from the condition stipulated in item (1) of paragraph (a) of Article (6) and item (1) of Article (7) of these Instructions, for the purpose of approving them as branch managers within the limits of the licensed insurance branches, or as a manager for brokerage activities at the insurance broker.

(w) The person approved to work as a manager in brokerage at the insurance company before the issuance of these Instructions is exempted from the condition stipulated in item (1) of paragraph (a) of Article (7) of these Instructions, for the purpose of approving them as a manager for brokerage activities at the insurance broker, or for continuing to work at the insurance broker within the limits of the licensed insurance branches.

(z) For the purpose of accrediting the experience of employees at the insurance broker, the previous experience of employees at the licensed insurance broker is accredited before the issuance of these Instructions, provided that:

1. The Central Bank provides a certified certificate of experience.
2. The Central Bank provides the job description of the employee for the relevant period.
3. The Central Bank provides proof of payment of social security contributions by the company for the relevant period.

(h) The Governor decides on any matters related to regularization or the transitional phase as stipulated in these Instructions.

Article 24:

Repeal

The Instructions for Licensing Insurance Brokers, Regulating Their Business and Liabilities, No. (11) of 2005, and its amendments are repealed. All decisions issued under them remain in effect to the extent that they do not conflict with these Instructions. The procedures carried out under them are considered replaced or repealed by the provisions of these Instructions for the purpose of regularizing the situations of persons licensed to practice insurance brokerage activities in accordance with the provisions of these Instructions.

Board of Directors of the Central Bank